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How Uber and Taxify Push Kenyan Drivers to Poverty

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Nairobi, East Africa’s largest city and financial hub, is famous for its nightmare traffic, chaotic public transport system, and badly maintained roads. Getting to work in Nairobi is a daily ordeal.

Nairobi’s middle class have abandoned the chaotic public transport for uber-like transportation. Thousands of Uber and Taxify (now Bolt) drivers have been moving Nairobi residents to their destinations for years. In recent months, drivers have been protesting against poor working conditions and poor pay. However, no one is coming to their aid. The government is not listening, and seems it does not care. During one recent protest at Uhuru Park in central Nairobi, drivers were dispersed, 80 of them arrested, and their cars confiscated.

“Those drivers had to pay 50,000 shillings to get their cars back,” Mike Mwangi says.

One reason drivers took an industrial action was to force negotiations with Uber and   Taxify, Kenya’s two biggest ride-hailing firms because of low pay rate. When Uber and Taxify first launched in Kenya, they paid their drivers generously; some were making as much as 100,000 shillings, a fortune to many. However, in the past one or two years, pay has been cut drastically, and rising of fuel prices have made things worse.

“It is because of our government we are suffering,” says Mwangi, who has been driving for both Uber and Taxify in the last two years. He says his earnings have fallen by a half and after paying for fuel and other expenses. He says he gets around 80 shillings in a trip that his client paid 500 shillings.

For example, one of President Uhuru Kenyatta’s sons has invested in ride-hailing apps. He owns fleet of cars operating under Uber and Taxify. Uber loans these cars to drivers at around 1.2m shillings while they may have been purchased at around half a million shillings. Businessman Chris Kirubi, former Nairobi government among others political and business leaders also have unspecified number of cars in the ride-hailing business.

While politicians and other businesspeople continue to make money out of these apps, drivers remain trapped in loans. They cannot stop driving even if they want to because they have to repay their loans.

Rates per kilometres have dropped from 65 shillings to 37 and now stand at 27. Mwangi says the government does not want to regulate the ride-hailing companies and force a higher minimum wage. He says some government officials invested in these companies, and others have their cars driven in these platforms.

Drivers are bearing the brunt of price cuts. Mwangi says he is stuck in traffic for more than two hours, wasting fuel and time, and he does not get extra money for that.

“We cannot afford to eat at proper restaurants; we eat at kipandes. We take a chapatti and a cup of tea or a few slices of bread. That is what we can afford,” David Onyango, who drives for Taxify, says. Kipandes are informal restaurants mainly operated by women on the roadsides.

“That’s how we survive, but people see us in these cars thinking we are doing fine. These apps benefit the riders.”

The Kenyan drivers lack strong unions to fight for their rights.

Driving for Uber in other parts of the world is not as in Kenya. While Kenyan drivers suffer, their counterparts in the developed world earn decently.

For example, the typical American Uber driver earns $16 (1,000 shillings) an hour ($10 dollars after expenses), higher than the federal minimum wage. In London, Uber drivers earn $14 dollars per hour.

A recent survey also shows Uber drivers reporting higher level of life satisfaction than other workers do.

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Africa

African business leaders to follow on Instagram

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Business Insider has put together a list of five successful African business leaders to follow on Instagram.

These people frequently use their platform to share the best advice, business tips, updates on investment opportunities, or suggestions on raising much-needed funds. Plus, they also give you a sneak peek of what their lifestyle looks like outside of the business norm people know them for.

1) Tony Elumelu

Businessman, coach, and thought leader Tony Elumelu seeks to empower young Africans to achieve their dreams. He’s become one of the most recognised faces in leadership coaching, helping many aspiring entrepreneurs reach their maximum potential. His Instagram has garnered much attention with over 600,000 followers because it’s not only a source for inspiration with motivational quotes and videos, but it also gives you a glimpse at Robbins’s personal life.

2) Strive Masiyiwa

The Econet founder and chief executive sits on the board of multiple international organisations, including Bank of America, Rockefeller Foundation, and Unilever. He’s passionate, disciplined and motivated, and uses Instagram to teach others to be their best selves. With more than 280,000 followers, strive shares motivational quotes, updates on what he’s doing and other catchy images that will get your heart pumping.

3) Ibukun Awosika

Ibukun is an academic, astute businesswoman and powerful motivational speaker. Awosika is the immediate past Chairman of First Bank Plc. She is the former chair of the Board of Trustees of Women in Management and also sits on the board of the Nigerian Sovereign Wealth Fund.

Awosika trains people to be brave, authentic and effective leaders. To her 240,000-plus Instagram followers, she shares some of her favourite things (such as books, scriptures, and idols), motivational quotes and inspirational images that show her balanced and healthy lifestyle.

4) Vusi Thembekwayo

Serial entrepreneur, bestselling author, international speaker and internet personality Vusi Thembekwayo is one of the most inspirational business leaders of our time. As a venture capitalist, he has transformed businesses across the continent through his expertise in leadership and strategy. His direct approach personality pushes his followers to face challenges head-on. With 390,000-plus followers, his Instagram account is full of motivational quotes, videos and lessons to help you launch a business and pursue your passions.

5) Tara Fela Durotoye

A mother of three and a successful beauty entrepreneur, Tara Fela-Durotoye lives a busy life and shares it with her 280,000-plus followers on Instagram. Her bubbly, positive, and healthy lifestyle shines through her Instagram posts with inspiring quotes, pictures of her husband, relaxing scenic images and some of her favourite books.

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Business and Finance

40 million Africans could fall into poverty this year

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At least 39 million people could pass on as an added number to 30 million individuals rendered poor in 2020 as a result of the pandemic, the president of Africa Development has said.

According to Dr. Akinwumi Adesina, the “people impact” is the worst negative consequence of the pandemic as over 30 million people have lost their jobs, and inflation is spiralling out of control.

“The debt also began to accumulate. The debt to gross domestic product (GDP) went up to between 60 and 70 per cent. But that is just on the financial side. I am more bothered about the people’s impact,” he noted.

However, Dr. Adesina highlighted that 85 per cent of operators in the special economic zones of Africa believed that the foreign direct investment (FDI) flow to the continent would rise significantly again, while 90 per cent outside Africa believed the same.

In his statement, he explained that Africa holds the key to the global economy with enormous opportunity for return on investment (RoI), stressing that the continent has improved tremendously in the ease of doing business.

The President also called for “resilient and quality” infrastructure to make Africa truly attractive to the rest of the world after addressing the issue of poor infrastructure that has blighted the potential of the continental economy. “Recent investments by AfDB and other stakeholders are reversing the story,” he said.

Dr. Adesina was speaking at the virtual Africa Singapore Business Forum.

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Business and Finance

Fueled by Covid pandemic, Kenya’s mobile money transactions surge 52 percent in the first 6 months of 2021

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Mobile money transactions in Kenya has increased by 52 per cent in the first half of this year compared to 2020, as citizens continue to embrace digital payments as part of a measure to contain the spread of Covid-19.

from last December, when the country recorded the highest ever rate of mobile money transactions worth Sh605.70 billion.

Other insights from the central bank’s report showed that the number of registered mobile money accounts increased by six million to 67.8 million accounts at the end of June 2021 from 61.7 million at the end of June 2020. Similarly, the volume of mobile money transactions increased to 175.8 million transactions in June 2021, from 143.1 million transactions in June 2020.

The perceived growth in the volume of mobile money transactions in Kenya also spurred an increase in the country’s total active mobile money agents. According to the central bank data, the active mobile money agents increased by 63,820 to 301,457 agents in June, the highest level on record, up from 237,637 agents in the same period last year.

Safaricom’s M-Pesa service processed more than 90 per cent of the total transactions in the period under review as the platform has over 247,000 agents serving 28.31 million active customers spread across the country. This led to the payment service (M-Pesa) generating Sh82.65 billion in revenue for the network operator in the last financial year.

Globally, Kenya and Ghana continue to dominate the mobile money market as the two countries rank second and third after China in the highest mobile payment usage, according to a 2020 report by American research firm Boston Consulting Group (BCG).

Data based on the report estimated that the two African nations contributed between $15 trillion and $20 trillion to the total value of mobile financial services transactions in 2020.

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